We have done a pretty good job over the past year or so in offering up comparisons between upstream operating companies. We’ve hit the major shale players like Devon Energy, (NYSE:DVN), and Occidental Petroleum, (NYSE:OXY), as we as some of the big Canadian players like Canadian Natural Resources, (NYSE:CNQ), as well as the gas drillers. Nor have we missed the big International Oil Companies like, Chevron, (NYSE:CVX), and ExxonMobil, (NYSE:XOM).
When mulling over the topic for this month’s edition of Intelligent Investor, I thought it was time to move farther down the value chain and review a couple of refiners. This time around we are going to take a look at a couple of dedicated refining companies, both of which have roots that go deep into the past century.
Refining is a process that takes organic molecules coming from crude oil or other vegetable oil-based feedstock, and through thermal and pressure inputs, cracks them into useful products like gasoline, and diesel or jet fuel. Among the challenges U.S. refiners face are government-mandated formulas for their end products. These come in the form of requirements to blend various vegetable oils with petroleum to help meet air quality standards. In the past few years another mandate to reduce the carbon intensity of their operations and output. Toward that goal, many refiners are closing or repurposing oil refineries to accept alternative feedstocks.
In this article we will…